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The market expects Vedanta to do better than it ever has.
At today’s share price, buyers are assuming Vedanta grows about 5% a year, forever. Over the last ten years it actually grew about 0% a year. So the share price only makes sense if the business improves on its own track record. If it simply carries on as before, buyers today have paid for something they will not get.
- How it is valued: Discounted cash flow.
- What the price assumes: 5% growth, against 0% the model takes from its own record.
- Ten-year record: Between FY2018 and FY2025, Vedanta's revenue went from ₹92,923 crore to ₹1,52,968 crore — it compounded at about 7% a year over 7 years.
- Biggest swing factor: Commodity prices. Main risk: Commodity downturns.
01A resources conglomerate
Vedanta, controlled by Anil Agarwal's UK-based Vedanta Resources, produces aluminium, zinc, silver, oil and gas, iron ore, copper and power. It owns a majority of Hindustan Zinc, one of the world's largest zinc miners, and Cairn India's oil fields in Rajasthan.
Its parent carries significant debt, and Vedanta's large dividends are an important source of the cash that services it. The company has been pursuing a plan to split into separately listed businesses.
02What the market is assuming
Work backwards from today's share price and you can see what buyers are quietly taking for granted. Here is the growth that price implies for Vedanta, next to what the model assumes from the company's own record.
The further apart these two numbers are, the bigger the bet a buyer at today's price is making.
03Vedanta's record, in plain numbers
Between FY2018 and FY2025, Vedanta's revenue went from ₹92,923 crore to ₹1,52,968 crore — it compounded at about 7% a year over 7 years. It reported a net loss in FY2020, and closed the period with net profit of ₹20,535 crore. In FY2025 it kept 13.4% of revenue as net profit — against a low of -5.7% in FY2020 and a high of 17.9% in FY2022. The latest year added 6.4% to revenue, close to its own long-run pace.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2018 | 92,923 | 13,692 | 14.7% |
| FY2019 | 92,048 | 9,698 | 10.5% |
| FY2020 | 83,545 | -4,744 | -5.7% |
| FY2021 | 86,863 | 15,032 | 17.3% |
| FY2022 | 1,32,732 | 23,710 | 17.9% |
| FY2023 | 1,47,308 | 14,503 | 9.8% |
| FY2024 | 1,43,727 | 7,539 | 5.2% |
| FY2025 | 1,52,968 | 20,535 | 13.4% |
| FY2026 | 78,437 | 25,096 | 32.0% |
04How Vedanta gets valued — and why
Discounted cash flowThis business is valued on the cash it is expected to generate, discounted back at its cost of capital — with growth taken from its own ten-year record rather than from guidance.
05What decides Vedanta's value
Commodity prices
Aluminium, zinc, silver and oil prices drive profit.
Hindustan Zinc
Its dividends and value are a large part of Vedanta's worth.
Parent debt
Pressure to upstream cash can shape dividends and decisions.
Demerger
Splitting into separate companies could unlock or reshape value.
06What could go wrong
- Commodity downturns. Falling metal prices hit every business at once.
- Group leverage. Refinancing pressure at the parent is a long-running concern.
- Governance. Related-party dealings draw investor scrutiny.
07What the full Vedanta valuation shows
Sign in free to see the complete Vedanta valuation
- ✓Fair value per share — from a ten-year discounted cash flow, every step shown
- ✓The Workbench — change revenue growth, the discount rate or terminal growth and watch Vedanta's value move
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against Hindalco, Tata Steel and Coal India
- ✓Downloadable report — the full write-up, yours to keep
08Compare Vedanta with peers
The same valuation, run side by side.
Vedanta vs HindalcoA resources conglomerate against a focused aluminium maker.→Vedanta vs Tata SteelDiversified metals against steel.→Vedanta vs Coal IndiaTwo commodity producers on the same cyclical lens.→09Questions people ask about Vedanta
What does Vedanta produce?
Aluminium, zinc, silver, oil and gas, iron ore, copper and power.
Why does Vedanta pay such large dividends?
It generates strong cash in good commodity years, and its parent relies on those dividends to service debt.
Vedanta or Hindalco — which is better value?
Two metals majors, compared side by side on their own page.
Is Vedanta overvalued?
At ₹262 the market is pricing in roughly 5% sustained growth, against the ~0% its own record supports. That is more than it has delivered, so the price is justified only if the business can hold a rate it has not previously sustained.
What is the intrinsic value of Vedanta?
It is computed from the filed financial statements using the method that fits this business (discounted cash flow), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
How much debt does Vedanta carry?
Debt to equity stands at 0.33, down from 1.11 at the start of the period — the balance sheet is a core input to the cost of capital used here.